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ExxonMobil Receives Warning From Turkey Before Thanksgiving

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Exxon Mobil Corporation (XOM - Free Report) recently received another warning from the Turkish government for hydrocarbon exploration in the exclusive economic zone (EEZ) of Cyprus. The government of Turkey claimed that the move from the world’s largest publicly traded energy company has the potential of breaking the delicate balance of region’s stability.

Geopolitical Turmoil

Notably, in October, ExxonMobil stated that it plans to go ahead with its exploration plans in the region, ignoring the warnings from the Turkish government. The company accepted the invitation from the Greek Cypriot to search for gas in the region, where the Turkish Cypriot side claims its ownership. ExxonMobil, accompanied by Qatar Petroleum, recently began drilling operations in the Block 10 of the EEZ.

Moreover, France’s TOTAL S.A. and Eni S.p.A. (E - Free Report) of Italy were invited by the Greek Cyprus last month, along with ExxonMobil, to bid for the Block 7 in the EEZ.

In February, the Turkish military vessels blocked the path of a drillship contracted by Eni, which was headed for the Block 3.

United States Backs Exploration Activities

Francis Fannon, U.S. Assistant Secretary of State for Energy Resources, sees the exploration activities in the region as a great opportunity. Importantly, Noble Energy, Inc. discovered a field offshore Cyprus in 2011, which was estimated to contain 4.5 trillion cubic feet of natural gas. The recent visit from Francis Fannon in Cyprus further backs ExxonMobil’s ongoing activities in the eastern Mediterranean.

ExxonMobil’s View

The significant hydrocarbon deposits in Cyprus’ neighbor countries, Israel and Egypt, makes ExxonMobil optimistic of generating positive results from offshore Cyprus. With backing from Washington, the company is expected to keep up with its activities in the region. The company has its presence in Cyprus for more than half a century and the recent developments are expected to enhance its footprint in the region. It has already acquired 3-D seismic data of the block and has plans to drill two wells in the area within its first licensee period.

Price Performance and Zacks Rank

Irving, TX-based ExxonMobil has lost 2% of its value in the past year against 2% collective rally of the industry it belongs to. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

 

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